23rd October 2003
Stewart Stephens, Gulliver Ireland
Stewart Stephens is managing director of Kerry-based Gulliver Ireland, the tourism information and reservations service provider and owner of the travel portal, GoIreland.com.
What are the main challenges facing the Irish tech sector?
Innovation and competitiveness - as everyone keeps saying. Innovation is not about inspiration, it's about having a culture and infrastructure that creates and builds on opportunities, that values research and development. The tourism industry has been transformed in the last few years by the internet and it's extraordinary how individual suppliers have responded and how new products have emerged as a result. There's a bit of a myth that it is only low-value jobs that are at risk from emerging economies. They are just as smart as us and a lot hungrier. We have to be clear about our value proposition.
Do we have the right technical skills in our workforce or do we need to shift focus?
We probably do have the right skills but different sets of skills need to be integrated in order to be of benefit. Marketing, for example, now has a huge technical component and these skills are usually found in very different people. A lot of wonderful websites designed by techies and graphic designers went broke because they didn't consider what consumers wanted. In the tourism sector, there is a huge need to extend core technical and marketing skills down the enterprise level in order to raise the game of the industry generally.
Can Ireland become the e-commerce hub of Europe?
I believe it can but only if a culture is created that sees e-business as an opportunity for Ireland to set standards internationally. The Gulliver system set the standard for electronic distribution in tourism in the early Nineties and Gulliver-type systems are now being implemented in tourism destinations all over the world.
What company do you most admire and why?
Obviously I'm interested in online travel companies but in general I admire companies that have a culture of innovation and that constantly ask questions about themselves. 3M would be a great example internationally.
Can you think of a company, large or small, that has used imagination in its e-business strategy?
It's hard to find examples where the internet has enabled an entirely new business model - mostly its an efficient distribution channel that replicates the offline process. Ebay would not be possible without the internet and Priceline's "demand collection" model was internet driven.
What will we be using the internet for 10 years from now?
The web will be an invisible part of our daily lives that we don't think of in its own right, but in terms of things that are powered by it.
Hotelmarketing.com is great for what's happening in the hospitality sector worldwide and I'm a bit of an Amazon.com addict.
For an extended interview see The Friday Interview on www.siliconrepublic.com
In conversation with BRIAN SKELLY
24th October 2003
The Friday Interview: Stewart Stephens, Gulliver Ireland
Gulliver is one of the longest established names in the Irish internet industry. Initially jointly created by Northern Ireland Tourist Board and Bord Fáilte as an online tourist reservations and information system, Gulliver was acquired by Fexco, the Kerry-based financial services group, in 1997 after the two tourist boards put it up for sale.
At that time, Gulliver was essentially an internal reservations system used by tourist offices north and south to book accommodation for visitors. Under Fexco's ownership its scope has expanded. In addition to being a key resource for tourism offices it is the information system that sits behind some 20 travel sites including the Irish Times site and the Tourist Board's Ireland.travel.com. It is also the engine behind Gulliver Ireland's own consumer portal, Goireland.com, which this year will receive about four million unique visits and was recently nominated for three Golden Spider Awards, the so-called Oscars of the Irish internet industry
Such is Gulliver's success that imitators are popping up all over the place, says Stewart Stephens, managing director of Gulliver Ireland. "When it started, Gulliver was unique in terms of destination systems but it has been copied a lot over the years and there are initiatives going on in different countries. Wales have just developed a Gulliver clone, Scotland are working on one, so too are England. Holland has one, as do the Canadians. It's becoming standard practice but there's nowhere in the world that would have the same level of penetration as we do; we have about 9,000 properties which can be booked online in real time."
Part of the uniqueness of Gulliver Ireland is its quasi-public service remit. Tourism Ireland (as it is now) and the Northern Ireland Tourist Board still own 26pc of the business and as part of the acquisition deal, Fexco agreed not to discriminate against any property owner from the point of view of either location or size. "Mrs Jones in the Black Valley can been booked online. Even if she doesn't have a computer we'll maintain her availability over the phone. If she gets a booking online, we simply send her a letter specifying the dates of the booking," says Stephens.
While the service is not free - Mrs Jones and thousands of accommodation owners like her pay €65 plus Vat per year plus a 10pc levy on each booking - the fact that it is available at all is what makes Gulliver stands apart from rival booking services, in Stephens' view. "We act in the best interests of the industry," he explains. "There would be no commercial booking entity that would bother with B&Bs. They would cherry-pick the hotels in the major centres because they know they can sell those and the more business they give to an individual property, the more availability they can get."
In the early days, internet businesses were often run by a couple of people out of someone's garage or loft but Gulliver certainly resembles the more traditional bricks and mortar operation. Based in Fexco's headquarters in Killorglin, Co Kerry, Gulliver has 50 staff of its own and piggybacks on corporate resources, primarily the in-house IT division, Fexco Communications, when it needs to.
Rather like Amazon.com, Gulliver is a low-value, high-throughput internet business. Its success depends on little packets of revenue constantly trickling through. It is also cash positive, still a rare enough feature of internet businesses. Stephens attributes this to the application of sound business principles. "Mistakes were made by people who thought the web was a new business. It's not; it's just a new business process," he says.
As a business whose primary selling tools are the internet and the telephone, Gulliver Ireland's Kerry location should not matter, but it does, according to Stephens, who says the company is being penalised for its rural location through having to pay higher telecoms costs. "I wouldn't see the high cost of broadband as an inhibitor for tourism or SMEs but where it really kicks is for people such as ourselves who are trying to run bandwidth-hungry applications from Killorglin. There's a serious disadvantage for us. For example, we would host our bandwidth-hungry stuff, such as the images on Goireland.com, on servers in Dublin because it costs too much to send them over lines to Kerry." While the telecoms situation is just about bearable now, Stephens worries that without affordable broadband in Ireland, his business will not be able to operate efficiently if internet traffic continues to grow in line with expectations.
Looking to the future, Stephens expects no major deflection from the course Gulliver has taken to date. The biggest plus for the business, he stresses, is the market it operates in.
Today, less than 3pc of global travel is booked online. That percentage is expected to grow to 25pc by the year 2010. "Travel has been one of the success stories on the web. And travel companies are moving to the web very quickly. For instance, our internet bookings this year will be up 70pc on last year and last year our bookings were up 100pc on the year before. The whole industry lends itself to online distribution and we're surfing that wave. We're in the right place at the right time."
By Brian Skelly